Government to aim for 9-9.5-% growth in 12th Plan period

Even as the slowdown in the economy casts a shadow over prospects for growth given the slowdown in industrial growth and soaring inflation, the government today said that it aimed to achieve a growth rate at 9-9.5 per cent on an average during the 12th Plan period.

''The economy is likely to clock a growth rate of about 8.2 per cent on an average in the current five-year plan and we should aim at raising this average to 9-9.5 per cent in the 12th plan,'' finance minister Pranab Mukherjee said at the Assocham Banking Conclave in New Delhi.

However, Mukherjee admitted that the Reserve Bank's action of tightening the monetary policy to rein in inflation might hurt growth. ''The major challenge right now is to contain price rise. Monetary measures may end up moderating growth if they have to be persisted for an extended period of time,'' he said.

Meanwhile, the RBI, yesterday, upped key policy rates for the 10th time since March, 2010, to check rising inflation, which crossed 9 per cent in May.

However, the finance minister maintained that the drivers of economic expansion, namely the industry and services sector, would likely sustain their growth momentum. ''I am, so far, hopeful that we should be able to repeat the growth performance of 2010-11 in 2011-12 as well,'' he said.

Regarding fiscal deficit, he expressed confidence over meeting the target set for this year even though it was ''hard'' to reach.